Russian Pt Putin’s conciliatory statement pushed oil barrel price upward to $ 53.60

date 2016/10/10 views 175 comments 0
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icon-writer By: Imène Aouimer /*/ English Version: Med.B.

Crude oil prices jumped as much as 3% on Monday, with Brent hitting one-year highs after Russia said it was ready to join OPEC in curbing crude output, and Algeria called for similar commitments from other non-OPEC producers.

According to inside reports, Brent crude hit its highest level since Oct. 12, 2015, reaching $53.73/bbl before paring gains to trade at $53.18/bbl.

US West Texas Intermediate crude rose its highest since June 10 at $51.60/bbl, before easing back to $51.33/bbl, up $1.52, or 3%.

Russian President Vladimir Putin said an output freeze or even a production cut were likely the only right decisions to maintain energy sector stability. “Russia is ready to join the joint measures to cap production and is calling for other oil exporters to join,” Putin was quoted to say IN Istanbul outside the International energy meeting on Monday

President Putin underlined his country's readiness, "in the current circumstances to somewhat toe the current Opec line, saying we believe that a freeze or a cut in oil production the only way to maintain the stability of the energy sector and accelerate the rebalancing of the market."

As result, Putin's statement, contributed to the rehabilitation of the oil market, and raising the price of oil within minutes of his speech, with the oil barrel price reaching $ 53.60 on the world market. This is a price that hasn’t been recorded since October 12th of last year.

For his part, Algeria's energy minister, Noureddine Bouterfa, told Reuters yesterday, that there are commitments from oil producers outside OPEC about reducing supplies during the Istanbul meeting, which he described as a forum of "consultations" which will precede the meeting in Vienna of the OPEC Organization in November 2016.

For its part, Saudi Arabia announced yesterday that it is unlikely that the price of a barrel of oil would reach $ 60 by the end of this year, while warning that the production cut could cause a dramatic shock on the markets.

OPEC officials are to hold a series of meetings in order to finalize an agreement reached in Algeria, whereby they agreed on a modest cut in production in the first move of its kind since 2008.

Contrary to what happened in the first half of 2016, the bloc of Petroleum Exporting Countries appears to be more serious now about the global supply glut and price-support management.

On 30 November, the members of "OPEC" will get together in Vienna; to crystallize the agreement, which was reached in Algeria late last month, and by giving the green light to producers to determine the various quotas.

OPEC leaders have said that they aim to cut about 700,000 b/d, bringing its output to 32.5-33.0 MMb/d by the time it meets in Vienna for its policy meeting on Nov. 30. It will be OPEC’s first output reduction in eight years, and comes two years after prices crashed from highs above $100/bbl. OPEC has also asked Russia and other non-members to join in making cuts.

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